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Last Updated: Thursday, 18 March, 2004, 06:09 GMT
Gordon Brown sets out his stall
Gordon Brown
Breakfast will be speaking to the chancellor at 0750
It was predicted by many pundits to be an "un Budget" - but yesterday, the chancellor promised an increase in public spending - paid for by job cuts in the civil service.

Thousands of jobs will go at the Department of Work and Pensions - but the government is still borrowing beyond its means, according to the Tories.

They've accused Gordon Brown of being a "credit card chancellor" - and the Liberal Democrats say he's putting off tough choices until after the next election.

  • Breakfast's been doing some number crunching - and this morning, we looked at the budget from all sides:

  • The Chancellor of the Exchequer, Gordon Brown, told us that he could have cut taxes - but he'd decided instead to plough more public money into defence, security and education.

    "Michael Howard is completely wrong when he says it's a borrow now, tax later budget.

    "Debt is far lower here than in our competitors. Because we have been very prudent and responsible we are able to borrow for investment.

    "The choice yesterday was whether to cut taxes or to improve front-line services."

  • The Shadow Chancellor Oliver Letwin accused Mr Brown of having a "black hole" in his finances.

    He told Breakfast: "the problem the Chancellor has which just about everybody is now agreed about - certainly all the independent commentators - is that he has got a black hole in his finances.

    "He is borrowing an enormous amount more, about four times more, than he said he would be couple of years ago. "And that has to be repaid at some point, like all borrowing. That will mean if there is a Labour government after the next election, there will be tax rises."

  • The Liberal Democrats' Treasury Spokesman Vince Cable told us: "The economy is in generally good shape - but there are all sorts of problems building up.

    "The two biggest worries are consumer debt - and the possiblity of a housing crash."

  • We found out what the budget means for one family - the Mills from Bristol. They have one baby - and they live on an income of about 14,00 a year.

  • You can also get more detailed background information from BBC News Online by clicking on the link at the top right of this page

    Highlights

    Mr Brown announced the loss of 40,000 civil servants' jobs - one of the measures aimed at saving money.

    By making savings, he was able to avoid raising taxes, a move that could have had dire consequences with the election possibly only a year away.

    The money saved from the job cuts, would be spent on public services.

    Paul Noon, general secretary of Prospect, which represents 40,000 civil servants, said: "Nobody would argue with the need for genuine efficiencies - but not cost-driven cuts."

    There was good news for pensioners over 70 who will get an extra 100 on top of winter fuel payments.

    The duty on spirits was frozen, and increased by one penny on a pint of beer and four pence on a bottle of wine, whilst cigarettes go up by 8p on a packet of 20.

    Mr Brown said that an increase on fuel duty would be frozen for six months.

    He added there would be no increase in capital gains tax or corporation tax, and the threshold for inheritance tax would be increased.

    Meanwhile any decision on the UK joining the Euro would be deferred until after the next Budget when economic tests would be 're-assessed'.

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  • WATCH AND LISTEN
    A pre-election budget
    The BBC's political correspondent James Landale reports for Breakfast



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